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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI R.C. SHARMA, AM & SHRI SANDEEP GOSAIN, JM
सुनवाई की तायीख / : 20/07/2016 Date of Hearing घोषणा की तायीख / : 20/07/2016 Date of Pronouncement आदेश / O R D E R Per R.C. SHARMA, A. M.: These are the appeals filed by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals)- 1, Mumbai (‘CIT(A)’ for short) dated 27.02.2015 for the assessment year (A.Y.) 2009-10, in the matter of order passed u/s 143(3) r.w.s. 147 , u/s 143(3) of the I.T. Act,1961respectively.
In both these appeals Revenue is aggrieved for deleting disallowance made on account of depreciation on fixed assets.
Ld. AR placed on record order of tribunal in assessee’s own case for the A.Y. 2008-09, dated 30.9.2015, wherein similar claim of depreciation was allowed. Precise observation of tribunal is as under: “6. I have heard Ld Representatives of both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed on record. On perusal of the order of the CIT (A) in general and paras from 3.7 to 3.10 in particular, I find the same are relevant in this regard. Considering the importance of the said paras 3.7 to 3.10 of the impugned order, the same are extracted as under: “3.7. I have also perused the order in the case of the appellant for the A Y 2005-06 vide appeal no. CIT(A)-1/IT-E1(81)/2011-12, wherein Ld err (A) has allowed depreciation as well as carry forward of losses: Similar decision has been given by the Ld CIT (A) in the case of the appellant for AY 2009-2010 vide appeal no. CIT(A)-1/IT-E1(6)12011-12. Since, the facts in the current year are identical, I find no reason to differ from the above decisions of the Ld CIT (A). 3.8 Further, it is seen that the issue under consideration is covered In favour of the assessee by other decisions and also it has been held by various courts that depredation is to be allowed even if the entire cost of the asset was treated as application /expenditure in the year of purchase.
3 & 3424/M/2015 (A.Y.2009-10& 05-06) ACIT vs. His Holiness Syedna Taher Saifuddin Memorial 3.3. The decision of the Hon'ble Supreme Court In the case of Escorts Ltd (supra) will not apply to a charitable organization as it pertains to claim of depreciation under another section of the Act when 100% or more depreciation had already been provided u/s 35. The Hon'ble Supreme Court In that case was dealing with a case relating to two deductions both under sections 10(2)(vi) and 10(2)(xiv) of the 1922 Ad or both under section 32(l)(ii) and ,. 35(1)(iv) of the Act The assessee therein had Incurred expenditure of a capital nature on scientific research relating to the business which resulted Into acquisition of an asset. The assessee had sought to claim a specific percentage of the written down value of the asset as depreciation and at the same time claimed deduction, In five consecutive years of the expenditure incurred on the acquisition of the asset The judgment of the Hon'ble Supreme Court in Escorts Ltd thus distinguishable for the above reasons. Moreover, the Supreme Court decision has been distinguished inter aIia by the Punjab & Haryana High Court in the case of Market Committee Pipli and Tiny Tots Education Society (both supra) as well as Mumbai and Chennai Tribunals In the cases listed above.” Further, Hon'ble Bombay High Court In the case of DIT (E) vs. Framjee Cawasjee Institute (supra), has held that even if the amount spent on acquiring depreciable asset was treated as application of income of the trust in the year of acquisition, depreciation would still be allowable In subsequent years. This decision of the Hon'ble Bombay High Court was followed in CIT Vs, Institute of Banking Personnel Selection (supra) and CIT vs. Sanjeevan Vidyalaya Trust (supra). Hence, I direct the AO to delete the disallowance of depreciation of Rs.1,14,71,022/- in AY 2010-2011 and Rs.68,89,365/- in AY 2011-2012.” From above, it is very clear that the judgment of Apex Court in the case of Escorts Ltd.( supra) relied on by the AO while making the disallowance is not applicable to a charitable organization, like the assessee in the present